Five years ago, Tom Gallagher, CEO of the trade organization Dairy Management Inc., asked Cooperrider to facilitate an appreciative inquiry summit for the entire U.S. dairy industry to kickstart its sustainability efforts. In 2013, Cooperrider facilitated the second annual U.S. Dairy Sustainability Awards celebrating how far the industry has come. We caught up with him to learn more about the project and how the practice of AI is evolving.

W: Why did the major players in the dairy industry decide to make sustainability the focus of their AI summit?

DC: The dairy industry has quite a big footprint in terms of carbon, methane and toxins in waters. So dairy, which has a history of concern for the earth, is an industry with a big negative footprint in a lot of ways on a lot of earth systems: water, carbon, transport. So Tom Gallagher’s feeling was that the whole industry needed to come together to take a leadership role and exceed expectations, exceed EPA requirements.

W: How did Gallagher decide that an AI summit was the best way to start that process?

DC: He and his leadership team had earned the AI certificate offered through Weatherhead Executive Education. Then he got excited by a project I was involved with, with Dave Sherman, a former Doctor of Management (DM) student, and Walmart. They had launched their huge commitment to sustainability, including zero waste and completely renewable energy. Dave and his company, a strategy firm called Blu Skye, brought me in to help to facilitate several major AI summits with Walmart.

One was to help Walmart develop a sustainability index to use with their suppliers. Every decision that goes into a product at Walmart is now based not just on price but on the whole life cycle, from resource use to transportation and packaging. So they developed a prototype of a sustainability index across the industry--and suddenly 65,000 suppliers needed to understand sustainability!

So for electronics, for apparel and so on, Walmart is involved in sustainability in all these areas. One is the area of food, and I think Tom got interested in the stories he heard about how you could convene whole industries to turn sustainability into an innovation engine. Not just a cost, but a source for innovation that could be game-changing, creating new sources of value while reducing costs.

So for farmers to incorporate sustainability in their whole business model...it was kind of controversial! In that industry, margins are so thin already that to think about adding one more cost--which is the way our world thought about these things--it’s a nice sideline, a nice thing to bolt on, but to build sustainability as our business model? How do you do that? W: How did the dairy industry figure out that it was possible to do that?

DC: Through the next generation AI summit--I’m calling it the “sustainable design factory”--where people design collaboratively and design the prototypes for major initiatives right there on the spot. Ten major prototypes to move the whole industry forward came out of it, including methane-to-market biodigesters that take the biomass on a farm, sell the methane that is produced via existing natural gas infrastructure, and become a new source of revenue. Every form of waste is a lost opportunity to create revenue.

So farmers saw the real prototypes, for what they call the “Cow of the Future,” for research, for solar. They saw the massive savings that could come from radical packaging innovations and how that could add up to a lower-carbon industry. This community included farmers, the top universities and agricultural schools, the EPA and regulators, young leaders thinking about entering the dairy industry: It included every sector. So there were 250 to 300 people to launch this.

W: It’s amazing that you can get 250 to 300 people to agree on a set of projects and a path to implementing them.

DC: I think we’re entering into an age of macromanagement. When I teach, I ask managers, “What’s micromanagement?” Everybody knows what that is. Then I say, “What’s macromanagement?” They’ll look puzzled, and yet we’re in this world now where we have so much quick, instant access to a universe of strengths--way beyond our individual entity--so the great skill of leadership of the future is to bring in that outside world, so when we do strategic planning we have the customers in the room.

I think we live in this age of collaboration, and it requires a combination of capacities that are relatively new. I mean, we always taught that the most effective size for a group is six to eight people, so all our management techniques unfold from that assumption: from leadership teams of six to eight to shop-floor quality teams of six to eight. But what we never asked was, most effective for what? If it’s most effective for uniting strengths across a whole system, could it be that 300 people are more effective? If we want to tap into our capacity for innovation, could it be that 1,000 people are most effective? That you then have 1,000 ambassadors working to make the plan work? W: The dairy industry’s success is a great example of that.

DC: It’s really true. They’ve launched about $287 million in various projects, from enriched soil, to biodigesters, to renewable energy, to educational packages, to measurement systems. And very daring goals to reduce carbon emissions by 25%, even as the industry grows to feed a growing population.

It’s been singled out by Secretary of Agriculture Tom Vilsack as a model for every industry, and he’s held that up at a major UN conference on climate change as a premier example of an industry serving as a source of innovation. The USDA has contributed a lot of funding to plan and implement the prototypes, so it’s like the government is committed along with the industry.

And major corporations like Unilever and Walmart and the big dairy farms are all part of it, so it’s a wonderful example of public-private partnership to solve issues that are bigger than any single organization. That’s what I love about it.

I think that today, the real question when I talk with leaders of companies, and in this case, farms, is that they’re all looking to adapt to change. That’s on everybody’s mind: How do we create resilience? Well, it’s not just about change, but change at the scale of the whole. How do we move a whole company, a whole economic region like Northeast Ohio, a whole industry like the dairy industry?

That’s where I think the work of the Fowler Center for Sustainable Value is very distinctive. We have some of the cutting-edge tools for bringing large systems together with whole cities, with whole states. W: Can you talk a little about your recent work with the State of Massachusetts?

DC: I facilitated a summit with Governor Deval Patrick to help the state develop its long-term energy-efficiency goals--not to have panels, not to have speakers, but to co-design the plans. And what we’re learning is that it’s easy when you have the right configuration of strengths, with the customers, the regulators, the policy makers, the finance, the marketing, the creative, the transportation, the whole system in the room. It brings out the best in human behavior. Suddenly, we realize so much of our planning in our world is into silos, specializations and fragmentation, and our era calls for collaborative solutions and collaborative solution-making that is optimistic and hopeful and brings out the best in people.

W: If you could choose the next industry to follow the path the dairy industry has laid out, which would it be?

DC: The energy industry--and it’s many industries, really--but I think the number one sustainability opportunity to affect every single issue, from clean streams and air to international relations, is the energy industry. We have the opportunity over the next 30 years to completely transition away from a fossil fuel economy, and that is the opportunity of a civilization.

And what I want to say at the end of my career is that we took part, we’re on track as a human family to eradicate grinding poverty within a decade or two and complete the transition to a clean renewable energy economy. An economy where we’ve combined the capacity of a smart grid and the internet with renewable energy, where every home and neighborhood could be a producer of energy, and where our energy costs would go down. Because right now, we are working against a tidal wave. Our energy costs will continue to skyrocket, and if we don’t make this transition in an effective way, the impact on our weather systems, on our international crises, on our military expenditures, on our economy.... We are in a contained depression, and it will get worse, because all the costs of our natural resources will go up and up.

We’re in an explosive, exciting, important time of exponential technological innovation, and now we need exponential social innovation to increase our capacity to collaborate and manage issues and transitions across system boundaries and industry boundaries. Our current energy debates, whether they be about coal or fracking, are missing the point. We need to think longer term. We need a grand strategy for America.

The Weatherhead School of Management is different from other business schools. We are bold in our ideas, creative in our approach, and adaptive in our interactions within a changing business environment. We've enhanced traditional management education by integrating the fundamentals of business with ideas and practices that change individuals, organizations and societies. At Weatherhead, we develop leaders as good global citizens who innovate to create sustainable value.
Founded in 1939